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2015 (9) TMI 1014 - AT - CustomsRefund of SAD / Additional Duty - Validity of Sale transaction Entitlement of Exemption benefit Adjudicating authority sanctioned refund claim of 4% additional duty Commissioner (Appeals) dismissed appeal against Adjudication order on ground that refund sanctioned was not in violation of condition of Notification No.102/2007-Cus as Respondents had made sale transactions only on paper Held that - from agreement to supply it was clear that Respondents passed title of goods and certificates to project authority by raising invoices Sales tax authorities accepted sale of goods on basis of invoices and confirmed payment of CST Sale was completed as soon as titles were transferred to purchasers Thus, assessing officer cannot question basis of sales transactions Exemption Notification stipulates condition for availing exemption and determined prescribed method which were fulfilled by Respondent Supreme Court in case of M/s Vadilal Chemicals Ltd Vs State of Andhra Pradesh 2005 (8) TMI 121 - SUPREME COURT OF INDIA held that eligibility to exemption determined by prescribed method should not be denied based on other criteria No dispute that Respondents paid additional duty of customs and also paid VAT therefore, benefit of exemption notification cannot be denied Decided against revenue.
Issues Involved
1. Eligibility for refund of 4% additional duty of customs (SAD) under Notification No.102/2007-Cus. 2. Validity of sale transactions between the Respondents and GIPL. 3. Compliance with conditions stipulated in Notification No.102/2007-Cus for claiming refund. Detailed Analysis 1. Eligibility for Refund of 4% Additional Duty of Customs (SAD) under Notification No.102/2007-Cus The Respondents claimed a refund of the 4% additional duty of customs (SAD) paid on imported goods under Notification No.102/2007-Cus, as amended. The Central Government exempts goods imported for subsequent sale from the additional duty of customs, provided certain conditions are met. These conditions include payment of all applicable duties at the time of importation, issuance of invoices indicating non-admissibility of credit for additional duty, filing a refund claim with the jurisdictional customs officer, payment of appropriate sales tax or VAT, and submission of relevant documents evidencing these payments. 2. Validity of Sale Transactions Between the Respondents and GIPL The Revenue contended that there was no actual sale transaction between the Respondents and GIPL, asserting that the transactions were merely on paper. They argued that the sale invoices indicated sales below the purchase price and that GIPL had arranged the finance for the power project. However, the Respondents provided evidence, including an agreement of supply and a certificate from the Government of NCT of Delhi, Department of Trade & Taxes, confirming the sale and payment of CST. The Commissioner (Appeals) found that the title of the goods was transferred to GIPL upon raising the invoices, thus completing the sale. The sales tax authorities accepted the sale of goods based on these invoices. 3. Compliance with Conditions Stipulated in Notification No.102/2007-Cus for Claiming Refund The Respondents fulfilled all conditions stipulated in Notification No.102/2007-Cus for claiming the refund. They paid the additional duty of customs, issued invoices indicating non-admissibility of credit for the additional duty, filed a refund claim, and paid the appropriate sales tax or VAT. The Commissioner (Appeals) noted that the Respondents provided all necessary documents, including payment evidence of the additional duty and sales tax, invoices of sale, and a CA certificate verifying these payments. The Commissioner (Appeals) rejected the Revenue's argument that the CA certificate was issued without proper verification, finding no merit in this objection. The Tribunal found that the sales tax authorities had accepted the sale of goods based on the invoices and confirmed the payment of CST. The Tribunal held that the arrangement of finance by GIPL could not be a basis to deny the sale of goods. The exemption under Notification No.102/2007-Cus was granted based on the prescribed method, and the customs authority could not go beyond the sale transactions to dispute the nature of sales. Conclusion The Tribunal concluded that the Respondents had complied with all conditions for claiming the refund under Notification No.102/2007-Cus. The sales transactions were valid, and the title of the goods was transferred to GIPL upon raising the invoices. The Tribunal rejected the Revenue's appeal and upheld the orders of the lower authorities, granting the refund to the Respondents. The cross-objection was also disposed of accordingly.
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